Credito Emiliano S.p.a. · MIL:CE

Credito Emiliano — H1 2023 Earnings Presentation

25 slides from Credito Emiliano's earnings presentation, 2023

  1. Slide 1: Group Results 1H23

    yr S= GROUP RESULTS 1H23

  2. Slide 2: 1H23: Loans Growth and Asset Quality

    1H23: LOANS GROWTH AND ASSET QUALITY Loans Direct Funding LOANS GROWTH Loans to customers stood at 34.8 billion, up by +6.2% 3.7% YoY, more than almost 6 p.p. compared to +3.7% the Industry, down by 2.2% YoY. Direct funding up more than 6% YoY, in sharp contrast to the Industry, down by 2.3% YoY -2.

  3. Slide 3: 1H23: Profitability and Capital Soundness

    1H23: PROFITABILITY AND CAPITAL SOUNDNESS PROFITABILITY Strong growth of Net profit, up by more than 90% 298.7 vs 1H22 MLN 20.8% 17.9% Profitability ratios at the highest level in the Industry, ROTE and ROE at 20.8% and 17.9% respectively UTILE NETTO ROTE ROE 1H23 CAPITAL SOUNDNESS 14.4% Capital sou

  4. Slide 4: Business Diversification

    BUSINESS DIVERSIFICATION Operating Income 357.6 331.1 352.5 437.3 475.6 478.7 Core Operating Income** 318.6 329.0 345.4 429.5 425.5 463.6 €/million 0.0% 0.3% 0.5% 0.2% 0.3% 2.0% 10.9% 0.4% 1.6% 1.6% 2.9% 8.5% 44% 47% 36% 51% 56% 49% 53% 55% 51% 47% 40% 41% 1Q22 2Q22 3Q22 4Q22 1Q23 2Q23 Core NIM on O

  5. Slide 5: Contribution to Consolidated Net Profit

    CONTRIBUTION TO CONSOLIDATED NET PROFIT Commercial banking Credem Banca €192.1 mln Private Banking Credem Euromobiliare €24.7 mln Private Banking Extended Banking Services, Consumer Credit & Other Credem Factor Credemtel €35.6 mln Credem Leasing Avvera Blue Eye MGT SATA Wealth Management Euromobilia

  6. Slide 6: Sustainability

    SUSTAINABILITY ESG evaluation criteria in remuneration policy were extended -through the creation of a synthetic sustainable development indicator based on Scope 2 emissions, sustainable finance, training, gender equality, and compliance with the multi-year plan on environmental and climate risks -

  7. Slide 7: Reclassified Income Statement

    RECLASSIFIED INCOME STATEMENT Δvs ∆ vs • Remarkable Revenue trend (+38.6% vs 1H22), mainly driven by €/million 1Q23 2Q23 1H22 1H23 the growth of NII; noteworthy also the significant growth in 1Q23 1H22 Net Interest Income 234.8 269.5 14.8% 274.3 504.3 83.8% Non Interest Margin (+8.6%), despite the h

  8. Slide 8: Net Interest Income (1/3)

    NET INTEREST INCOME (1/3) Net Interest Income (€/mln) Euribor and BTP/Bund spread 223 209 270 192 180 6.0% 5.9% 5.8% 5.7% 149 5.6% 5.5% 5.4% 5.3% 5.2% 5.1% 224 235 187 3.36% 5.0% 4.9% 4.8% 4.7% 4.6% 4.5% 4.4% 4.3% 4.2% 4.1% 4.0% 3.9% 3.8% 2.63% 3.7% 3.6% 3.5% 3.4% 3.3% 3.2% 3.1% 3.0% 2.9% 1.77% 2.8%

  9. Slide 9: Net Interest Income (2/3)

    NET INTEREST INCOME (2/3) Customers spread Loans to customers 4.12 3.25 3.66 3.57 2.94 2.76 2.90 2.99 3.16 2.39 2.42 2.18 2.35 2.54 2.14 1.81 1.88 1.53 1.57 1.70 1.74 1.73 1.49 1.54 1Q22 2Q22 3Q22 4Q22 1Q23 2Q23 1Q22 2Q22 3Q22 4Q22 1Q23 2Q23 Credem: spread Industry: spread Credem: average loans rate

  10. Slide 10: Net Interest Income (3/3)

    NET INTEREST INCOME (3/3) Securities portfolio breakdown (€/mln, %) Italian government bond (€/bn) 6.2 6.0 6.0 14,060 14,824 14,656 14,683 12,996 11,860 5.6 4.7 4.2 Ita Govies 1H23 HTC 4.1 HTCS 0.1 40% 41% 41% 38% 35% FVTPL 0.0 42% Total 4.2 4% 1Q22 1H22 9M22 FY22 1Q23 1H23 4% 4% 4% 4% 4% 27% 25% •

  11. Slide 11: Non Interest Margin

    NON INTEREST MARGIN Total *(€/mln) 228.6 185.8 188.1 213.8 240.8 209.1 Performance Fees 38.9 6.8 40.5 13.8 Income from Financial 1.2 5.5 Activities 54.3 58.7 53.6 53.7 56.0 55.9 Banking Fees 15.9 26.9 24.1 12.3 16.2 21.7 Insurance Income 114.3 107.8 103.4 110.1 109.3 109.9 Asset Management and Broke

  12. Slide 12: Operating Costs and D&A

    OPERATING COSTS AND D&A Operating costs (€/mln) Employees 200 194 185 216 210 210 6,608 6,616 6,616 6,195 6,201 6,219 6,068 6,140 5,899 5,763 66 63 65 5,544 5,519 5,604 5,609 57 57 55 143 137 151 147 145 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2Q23 130 Financial Advisors 1Q2

  13. Slide 13: Loans to Customers

    LOANS TO CUSTOMERS Loans to customers (€/bn) Other Loans 10.0 9.8 9.8 10.1 10.2 9.9 Residential Mortgage 9.9 10.1 10.4 Leasing 9.6 9.7 9.8 3.0 3.2 3.2 3.2 Consumer Finance 3.0 3.1 2.4 2.5 2.7 2.8 3.0 2.2 Short-Term Loans 7.9 8.3 8.0 8.8 7.9 8.3 1Q22 1H22 9M22 2022 1Q23 1H23 Total 32.8 33.5 33.2 34.5

  14. Slide 14: Group Customers Funding: Net Inflows Breakdown

    GROUP CUSTOMERS FUNDING: NET INFLOWS BREAKDOWN AUC Direct Deposits AUM + Insurance Total Net Inflows 2,961 2,819 2,680 2686 1,945 1,635 893 1,193 1,093 723 517 570 568 462 446 214 265 -48 -95 1H19 1H20 1H21 1H22 1H23 -435 • Total net production was significantly positive and stood at 2.8 billion, wi

  15. Slide 15: Deposits, AUM and Insurance

    DEPOSITS, AUM AND INSURANCE Total funding Direct deposits & retail bonds** €/mln 1H22 FY22 1H23 +6.2% YoY Sight / Saving Depo. 33,602 35,378 35,848 Industry Credem CD and Other Deposits 1,044 951 930 +156% Total Direct Funding 34,646 36,329 36,779 Insurance Reserves* 8,007 7,704 8,102 -2.3% YoY Port

  16. Slide 16: Asset Quality: Gross NPL Ratio and Cost of Risk

    ASSET 900 QUALITY: GROSS NPL RATIO AND COST OF RISK 2021 Gross Non Performing Loans (€/mln,%) 600 2022 • Thanks to the absence of significant NPL 398 378 373 360 flows, Gross Total NPL remained remarkably 1H23 321 309 300 low and stood at 721 million Bad Loans Disposal ~86 mn ~14 mn 43 42 52 • Defau

  17. Slide 17: NPL: Coverage

    NPL: COVERAGE NPL (€/mln) Gross Net Coverage Bad Loans 308.8 79.1 74.4% UTP Loans 360.3 208.3 42.2% Past Due 51.6 40.6 21.3% Total NPL 720.7 328.0 54.5% + Net NPL +328.0 NPL Coverage - (Shortfall + Addendum + Calendar) -58.8 NPL Net of Shortfall 269.2 80.0% 74.4% Coverage incl. Shortfall 62.6% 70.0%

  18. Slide 18: Asset Quality: Benchmarking

    ASSET QUALITY: BENCHMARKING Gross NPL Ratio (%) Stage 2 (% of gross loans) 12.2% EBA** threshold 9.6% 2.9% 6.4% 6.1% 2.4% 2.2% 2.1% 2.0% 2021 2022 1H23 1Q23 ITA 1Q23 EU 2022 1H23 1Q23 ITA 1Q23 EU Coverage The Group's excellent asset quality is best in class in the 65% Credem + EBA** industry thanks

  19. Slide 19: Assets & Liabilities

    ASSETS & LIABILITIES Assets (€/mln) 33,800 34,761 • Customer loans increased, while the 1Q23 1H23 securities portfolio reduced due to some additional profit-taking in 2Q23 9,008 8,419 8,214 • Due from Banks increased, driven mainly 7,337 6,922 4,938 5,474 5,491 by the June 2023 TLTRO repayment of 4.

  20. Slide 20: Bonds Issuances and Maturities

    BONDS ISSUANCES AND MATURITIES Issuances (€/mln) Maturities (€/mln) Covered Bond 100 + 750 Green Bond SP 600 CB 500 + Covered Green Bond SP Bond 600+ 600 500+Green SNP 500 + +Social T2* 200 CB 750 SNP 400 Covered 200 Bond Covered 400 Bond 500 SNP 600 Tier 2* 200 + Green Bond 1,250 T2 CRVita 850 Soci

  21. Slide 21: Liquidity (1/2)

    LIQUIDITY (1/2) Liquidity Reserves (€/bn) • The total value of the Group's Liquidity 16.0 Reserves increased compared to the Total end of 1Q23, reaching a total amount 14.7 of 16.0 billion Other ECB eligible 5.6 • The value of Cash and deposits with unencumbered assets 2.5 Central Banks decreased to

  22. Slide 22: Liquidity (2/2)

    LIQUIDITY (2/2) NSFR LCR 232% 136% 137% 205% 133% 162% 2021 FY22 1H23E 2021 FY22 1H23 Loan to Deposit Ratio* 0.93 0.95 0.91 • Liquidity ratios were confirmed well above minimum capital requirements, enabling the Group to have a greater flexibility in setting future funding strategies. LCR at 162%, s

  23. Slide 23: Consolidated Capital Ratios

    CONSOLIDATED CAPITAL RATIOS Fully phased data Fully phased data Credem Group Credemholding €, million 2022* 1H23 2022* 1H23 CET 1 2,916 3,129 2,649 2,865 Total Capital 3,320 3,533 3,193 3,415 Capital absorption from: 1,503 1,583 1,515 1,596 Credit and Counterparty 1,333 1,411 1,332 1,411 Market 9 10

  24. Slide 24: Credem Well Positioned to Face Future Challenges

    CREDEM WELL POSITIONED TO FACE FUTURE CHALLENGES DIVERSIFICATION FAST GROWTH BEST IN CLASS ASSET QUALITY Direct Funding AUC AUM & Insurance Reserves 77% 30% +37 42% bps 21% 19% 39% 49% 6.2% +3 bps CREDEM Peer Group Credem Industry Credem Peer Group FUNDING MIX LOANS GROWTH LAST 10 YEARS COST OF RISK

  25. Slide 25: Disclaimer and Contacts

    DISCLAIMER AND CONTACTS The manager responsible for preparing the company’s financial reports Mr. Paolo Tommasini of Credito Emiliano S.p.A., declares, pursuant to paragraph 2 of Article 154 bis of the Consolidated Law on Finance, that the accounting information contained in this presentation corres

Credito Emiliano S.p.A. (Credem) — H1 2023 Earnings Presentation on 6ix